AU Small Finance Bank (AUBANK) Q1 24/25 earnings summary

Executive summary

• Board approved application to RBI for transition from Small Finance Bank to Universal Bank, forming a committee to oversee the process.

• Q1 FY25 marked the first quarter post Fincare SFB merger, with integration progressing on schedule and increased paid-up share capital.

• Focus remains on building a strong deposit franchise, optimizing cost of funds, and maintaining asset quality, with disbursement yield at 15.8%.

• Unaudited financial results for the quarter ended June 30, 2024, were approved, reflecting the amalgamation of Fincare Small Finance Bank from April 1, 2024.

• Delivered PAT of ₹50,257 lakh, up 30% YoY, with annualized RoA at 1.6%.

Financial highlights

• Total income for Q1 FY25 was ₹431,470 lakh, up from ₹277,346 lakh in Q1 FY24; Net Interest Income rose 54% YoY to ₹1,921 Cr.

• Net profit for Q1 FY25 stood at ₹50,257 lakh, up 30% YoY; EPS at 6.8 (not annualized).

• Gross Advances at ₹99,792 Cr (+3.4% QoQ); Deposits at ₹97,290 Cr (flat QoQ, +40% YoY); CASA ratio at 33%.

• NIM expanded to 6.0% (vs 5.7% Q1'FY24); Cost to Income ratio improved to 59.9%.

• GNPA/NNPA at 1.78%/0.63%; PCR at 84%; Capital adequacy ratio at 20.11%.

Outlook and guidance

• Deposit growth target of 25% for FY25, with confidence in achieving INR 25,000 crore in new deposits over the next nine months.

• Margins expected to moderate but remain within guided range for FY25; NIM guidance at 5.5%-5.8%.

• Credit cost for FY25 expected to normalize to 1.1% for the year, with microfinance credit cost provisioned at 3%.

• Cost to income ratio expected to be around 61%-63% for the year.

• Board has initiated the process to transition to a Universal Bank, subject to regulatory approvals.